STRATEGIC ADVANTAGE PROFILE.
Every
firm has strategic advantages and disadvantages. For example, large firms have
financial strength but they tend to move
slowly, compared to smaller firms, and often cannot react to changes quickly.
No firm is equally strong in all its functions. In other words, every firm has strengths as well as weaknesses Strategists
must be aware of the strategic advantages or strengths of the firm to be able
to choose the best opportunity for the firm. On the other hand they must
regularly analyse their strategic disadvantages
or weaknesses in order to face environmental threats effectively. In
this session, we shall examine the strategic advantage factors that management
analyses and diagnoses to determine the
internal strengths and weaknesses with which it must face the opportunities and threats from the environment. In
the discussion of these factors, it is not possible to consider in detail,
subject matter which are covered by courses on Marketing, Human Resources, Finance
Management etc. Only a listing of these
factors will be presented. Students should refer to books and courses that they
have attended for details. The order
of discussion does not indicate importance of the subjects. It is just a convenient
ordering of line and staff factors. These factors will be covered under the
following broad headings:
1 Marketing and Distribution
2 R & D and Engineering
3 Production and Operations Management.
4 Corporate Resources and Personnel
5 Finance and Accounting
Strategic Advantage Factors: Marketing and
Distribution
1. Competitive structure and market share:
To what extent has the firm established a strong mark share in the
total market or its key sub markets?
2. Efficient and effective market research system.
3. The product-service mix: quality of products and services.
4. Product-service line: completeness of product-service line
and product-service mix; phase of life-cycle the main products and services are
in.
5. Strong new-product and new-service leadership.
6Patent protection (or equivalent legal protection for services).
7. Positive feelings about the firm and its products and
services on the part of the ultimate consumer.
8. Efficient and effective packaging of products (or the
equivalent for services).
9. Effective pricing strategy for products and services.
10. Efficient and effective sales force:
close ties with key customers. How vulnerable are we in terms of
concentrating on sales to a few customers?
11. Effective advertising: Has it established
the company's product or brand image to develop loyal customers?
12. Efficient and effective marketing promotion activities
other than advertising.
13. Efficient and effective service after purchase.
14. Efficient and effective channels of distribution andgeographic
coverage, including internal efforts
.
R & D (Research and
Development) and Engineering function can be a strategic advantage for two
reasons:
1. It can lead to new or improved products for
marketing 2. It can lead to the development of improved manufacturing or
material processes to gain cost advantages through efficiency.
Strategic Advantage Factors: R&D and
Engineering
1. Basic research capabilities within the
firm2. Development capability for product engineering3. Excellence in product
design4. Excellence in process design and improvements5. Superior packaging
developments being created6. Improvements in the use of old or new materials7.
Ability to meet design goals and customer requirements8. Well-equipped
laboratories and testing facilities9. Trained and experienced technicians and
scientists10. Work environment suited to creativity and innovation11. Managers
who can explain goals to researchers and research results to higher managers12.
Ability of unit to perform effective technological forecasting.
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